What is an Audited Financial Statement?
An audited financial statement is a comprehensive report that includes your organization’s financial activities and position, which has been examined and verified by an independent external auditor. This audit provides assurance that your financial statements are accurate, complete, and in accordance with accounting standards and regulations.
Importance of Audited Financial Statements for Business in Saudi Arabia
When entering the Saudi Arabian market or establishing your business presence, providing the latest year's audited financial statements is often a crucial requirement. Here’s why:
Credibility and Trust: Audited financial statements provide credibility and build trust with Saudi regulatory authorities, financial institutions, and business partners.
Compliance: Compliance with local laws and regulations is mandatory. Saudi authorities require audited financial statements to ensure transparency and reliability of financial information.
Financial Health Assessment: These statements help in assessing the financial health and stability of your business, which is essential for obtaining licenses, permits, and other legal formalities.
Components of an Audited Financial Statement
An audited financial statement typically includes:
Balance Sheet: A snapshot of your company’s financial position at a specific point in time, showing assets, liabilities, and equity.
Income Statement: A report on your company’s financial performance over a period, detailing revenues, expenses, and profits or losses.
Cash Flow Statement: An analysis of the cash inflows and outflows from operating, investing, and financing activities.
Statement of Changes in Equity: A summary of the changes in your company’s equity during the reporting period.
Notes to the Financial Statements: Additional details and explanations of the financial statement items.
Steps to Provide Your Latest Year's Audited Financial Statement
Prepare the Financial Statements: Ensure your financial statements for the latest fiscal year are prepared in accordance with international accounting standards.
Engage an External Auditor: Hire an independent and accredited external auditor to review and audit your financial statements.
Audit Process: The auditor will examine your financial records, internal controls, and compliance with accounting standards. This process includes verification of transactions, evaluation of financial practices, and confirmation of account balances.
Audit Report: After completing the audit, the auditor will issue an audit report. This report may include the auditor’s opinion on the accuracy and reliability of the financial statements.
Translation: If the audited financial statements are not in Arabic, they must be translated by a certified translator.
Submission: Submit the audited financial statements along with the audit report to the relevant Saudi authorities or business partners as required.